How to Start a Nonprofit: Internal Processes and Systems

Nonprofit Internal Processes
This is the conclusion of a five-part series on how to start a nonprofit organization. Keep in mind that the sequence in which you complete these tasks may vary, but each is important.  This final post will explore the steps to creating your Internal Processes and Systems.

Internal Processes / Systems

1.  Set up operating procedures: Creating a set of operating procedures should make your day-to-day operations run more smoothly, not the opposite.  If you are new to this sort of thing, sit down with another nonprofit director who has been at this for awhile.  There’s no need to learn all of your lessons the hard way.

 2. Adopt accounting system or service: It is absolutely critical that you keep an accurate accounting of your financials.  Remember, nonprofit organizations must make their financial reporting available to both their donors and the general public upon request.

3. Review insurance needs and secure adequate coverage: There may be steps during the startup process that you are tempted to ignore for awhile, or skip all together.  But securing appropriate insurance coverage should not be one of them.

4. Create a compliance calendar to insure timely filing of all periodic and annual reports (local, state, and federal, such as Form 990: Filing your paperwork on time with the county, state, and IRS takes lots of time and even more organization, but falling behind leads to more stress than you need.

5. Set up payroll system and develop job descriptions: It’s not uncommon in smaller, startup organizations for one or two people to do all the work for very little pay.  But this is not a long-term solution.  Finding the right people to do the right jobs is paramount to the success of your mission.

7. Develop system to evaluate, analyze, improve, and report on program results and effectiveness (critical tool for management, marketing, and fundraising efforts): Remember that your systems are perfectly designed to achieve the results that you’re getting.  Evaluate the results of your programs again and again and again.

8. Establish system for providing receipts for gifts of over $250 to comply with IRS requirements: Your receipt letters don’t have to be boring.  Use this opportunity to thank your donors in a special or unique way.

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